Ch01 2014 Student Handout 1

10/9/2014

1

2006 Prentice Hall, Inc. 1 1

Operations

Management Chapter 1 Operations and Productivity

2006 Prentice Hall, Inc.

PowerPoint presentation to accompany

Heizer/Render

Principles of Operations Management, 6e

Operations Management, 8e


INDUSTRIAL ENGINEERING

science Engineering

Approve

(fundamental)

apply

Industrial

Hospital

Plantation

Bank

Government organisation

Service sector

Operation

management

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Learning Objectives

When you complete this chapter, you should be able to:

Describe or Explain :

A brief history of operations management

Career opportunities in operations management

The future of the discipline

Measuring productivity


What Is Operations Management?

Production is the creation of goods and services

Operations management (OM) is the set of activities that creates value in the form of goods and

services by transforming inputs into outputs

input output

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Why is it important?

Sales $100,000 $150,000 $100,000 $100,000

Cost of Goods 80,000 120,000 80,000 64,000

Gross Margin 20,000 30,000 20,000 36,000

Finance Costs 6,000 6,000 3,000 6,000

Subtotal 14,000 24,000 17,000 30,000

Taxes at 25% 3,500 6,000 4,250 7,500

Contribution $ 10,500 $ 18,000 $ 12,750 $ 22,500

Finance/ Marketing Accounting OM Option Option Option Increase Reduce Reduce Sales Finance Production Current Revenue 50% Costs 50% Costs 20%

Profit and loss statement

Conc: effective operations is important for global competition.

71% 21% 114%

7500 2250 12000


What Operations Managers Do

Planning

Organizing

Staffing

Leading

Controlling

Basic Management Functions

They apply to the 10 decision making of OM

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Organizational Charts

Operations

Teller Scheduling

Check Clearing

Collection

Transaction processing

Facilities design/layout

Vault operations

Maintenance

Security

Finance

Investments

Security

Real estate

Accounting

Auditing

Marketing

Loans

Commercial

Industrial

Financial

Personal

Mortgage

Trust Department

Commercial Bank

Figure 1.1(A) (Plan and manage material, man, machine, method..)



Operations

Ground support equipment

Maintenance

Ground Operations

Facility maintenance Catering

Flight Operations

Crew scheduling Flying Communications Dispatching

Management science

Finance/ accounting

Accounting

Payables Receivables General Ledger

Finance

Cash control International exchange

Airline

Figure 1.1(B)

Marketing

Traffic administration

Reservations Schedules Tariffs (pricing)

Sales

Advertising

(Plan and manage material, man, machine, method..)

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Marketing Sales promotion

Advertising

Sales

Market research


Operations Facilities Construction; maintenance

Production and inventory control Scheduling; materials control

Quality assurance and control

Supply-chain management

Manufacturing Tooling; fabrication; assembly

Design Product development and design Detailed product specifications

Industrial engineering Efficient use of machines, space, and personnel

Process analysis Development and installation of production tools and equipment

Finance/ accounting Disbursements/ credits

Receivables Payables General ledger

Funds Management

Money market International exchange

Capital requirements

Stock issue Bond issue and recall

Manufacturing

Figure 1.1(C) (Plan and manage material, man, machine, method..)


Why Study OM?

OM is one of three major functions (marketing, finance, and operations) of any organization

We want (and need) to know how goods and services are produced

We want to understand what operations managers do

OM is such a costly part of an organization

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Ten Critical Decisions Ten Decision Areas Chapter(s)

Service and product design 5 Quality management 6

6 Supplement

Process and capacity 7 design 7 Supplement

Location 8 Layout design 9 Human resources, 10

job design 10 Supplement

Supply-chain 11 management 11 Supplement

Inventory management 12, 14, 16 Scheduling 13, 15 Maintenance 17

Table 1.2


The Critical Decisions

Service and product design

What good or service should we offer?

How should we design these products and services?

Quality management

How do we define quality?

Who is responsible for quality?

Table 1.2 (cont.)

Chapter 2

Chapter 7

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Process and capacity design

What process and what capacity will these products require?

What equipment and technology is necessary for these processes?

Location

Where should we put the facility?

On what criteria should we base the location decision?

Table 1.2 (cont.)

Chapter 6

Chapter 3



Layout design

How should we arrange the facility and material flow?

How large must the facility be to meet our plan?

Human resources and job design

How do we provide a reasonable work environment?

How much can we expect our employees to produce?

Table 1.2 (cont.)

Chapter 3

Chapter 5

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Supply-chain management

Should we make or buy this component?

Who are our suppliers and who can integrate into our e-commerce program?

Inventory, material requirements planning, and JIT

How much inventory of each item should we have?

When do we re-order? Table 1.2 (cont.)

Chapter 6

X



Intermediate and shortterm scheduling

Are we better off keeping people on the payroll during slowdowns?

Which jobs do we perform next?

Maintenance

Who is responsible for maintenance?

When do we do maintenance?

Table 1.2 (cont.)

X

X

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Where are the OM Jobs?

Figure 1.2


Chronology of OM

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Significant Events in OM

Figure 1.3


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Frederick W. Taylor

Born 1856; died 1915

Known as father of scientific management

In 1881, as chief engineer for Midvale Steel, studied how tasks were done

Began first motion and time studies

Created efficiency principles

Suggested that production efficiency in a shop or factory could be greatly enhanced

by close observation of the individual worker or elimination of waste time and motion

in his operation.


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Eli Whitney


In 1798, received government contract to make 10,000 muskets

Showed that machine tools could make standardized parts to exact specifications

Musket parts could be used in any musket


BS 57: 1951

Specification

for bolt and

nut

ANSI/

ASME

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Taylors Principles

Matching employees to right job

Providing the proper training

Providing proper work methods and tools

Establishing legitimate incentives for work to be accomplished

Management Should Take More

Responsibility for:


Frank & Lillian Gilbreth

Frank (1868-1924); Lillian (1878-1972)

Husband-and-wife engineering team

Further developed work measurement methods

Applied efficiency methods to their home and 12 children!

Book & Movie: Cheaper by the Dozen, book: Bells on Their Toes

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In 1903, created Ford Motor Company

In 1913, first used moving assembly line to make Model T

Unfinished product moved by conveyor past work station

Paid workers very well for 1911 ($5/day!)

Henry Ford


W. Edwards Deming


Engineer and physicist

Credited with teaching Japan quality control methods in post-WW2

Used statistics to analyze process

His methods involve workers in decisions

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Characteristics of Goods

Tangible product

Consistent product definition

Production usually separate from consumption

Can be inventoried

Low customer interaction


Characteristics of Service

Intangible product

Produced and consumed at same time

Often unique

High customer interaction

Inconsistent product definition

Often knowledge-based

Frequently dispersed

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Productivity

Productivity = Units produced

Input used O

I


Productivity

Single factor

productivity Multifactor

productivity

The ratio of one resources

(input ) to the goods and

services produced (outputs)

The ratio of many or all

resources (inputs) to the

goods and services

produced (outputs)

Ex: Labor

Productivity =

Units produced

Labor-hours used

Output

Labor + Material + Energy + Capital + Miscellaneous

Productivity =

Ex: Material

Productivity =

Units produced

material used

Ex: Capital

Productivity =

Units produced

Capital used

Also known as total factor

productivity

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Sebuah syarikat mengeluarkan sebanyak 20,000 bungkus roti pada bulan Januari dengan tenaga kerja seramai 10 orang. Mereka bekerja selama 8 jam sehari dan bilangan hari kerja pada bulan tersebut adalah 25 hari. Pada bulan Februari, pengeluaran syarikat telah meningkat kepada 22000 bungkus roti. Dua orang pekerja kontrak telah diambil pada bulan tersebut. Tempoh kerja harian dan bilangan hari bekerja bagi setiap pekerja adalah sama seperti bulan Januari. Oleh itu untuk menentukan indek produktiviti bagi pekerja, pengiraan seperti berikut perlu dilakukan:

Contoh :


Indek Produktiviti Pekerja Bulan Januari:

Pengeluaran = 20 000 bungkus roti

Jumlah bilangan jam pekerja = 10 orang x 8jam/hari x 25 hari/bulan = 2000 jam-orang / bulan

Indek Produktiviti Pekerja (Januari) = 20 000 bungkus roti/ bulan = 10 bungkus

2000 jam-orang/bulan jam-orang

Indek Produktiviti Pekerja Bulan Februari

Pengeluaran = 22,000 bungkus roti

Jumlah Bilangan jam pekerja = 12 orang x 8jam x 25 hari

hari bulan

= 2400 jam-orang / bulan

Indek Produktiviti Pekerja (Feb.) = 22,000 bungkus roti/ bulan = 9.17 bungkus

2400 jam-orang/bulan jam-orang

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Ulasan:

Peningkatan kuantiti pengeluaran roti sebanyak 10% tidak memberi peningkatan kepada indek produktiviti pekerja. Sebaliknya, pengambilan pekerja kontrak telah menyebabkan indek produktiviti pekerja bagi bulan Februari menurun sebanyak 8.3%. Sementara itu keuntungan syarikat akan bergantung kepada pendapatan jualan dan kos bagi sumber-sumber kemasukan.

Indek Produktiviti Pekerja (Januari) = 10 bungkus

jam-orang

Indek Produktiviti Pekerja (Februari) = 9.17 bungkus

jam-orang

=22 000-20 000

20 000

=10%

=9.17-10 x 100%

10

= -8.3 %


Case study

Collins Title Co has a staff of 4, each working 8 hours per day (for a payroll cost of $640/ day) and overhead expenses of $400 per day. Collins processes and closes on 8 titles each day. The company recently purchased a computerized title search system that will allow the processing of 14 titles per day. Although the staff, their work hours, and pay are the same, the overhead expenses are now $800 per day.

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Collins Title Productivity

Staff of 4, works 8 hrs/day 8 titles/day

Payroll cost = $640/day Overhead = $400/day

Old System:

= Old labor

productivity 8 titles/day

32 labor-hrs/ day

4 labors x 8hrs /day-labor 8 titles/day

Ex: Productivity = Units produced

Labor-hours used

= .25 titles/labor-hr



Staff of 4 works 8 hrs/day 8 titles/day


Old System:

8 titles/day

32 labor-hrs =

Old labor productivity = .25 titles/labor-hr

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Old System:

14 titles/day Overhead = $800/day

New System:

8 titles/day

32 labor-hrs =

Old labor productivity

= New labor

productivity


14 titles/day

32 labor-hrs =.4375 titles/labor-hr





Old System:


New System:

8 titles/day

32 labor-hrs =

Old labor productivity = .25 titles/labor-hr

14 titles/day

32 labor-hrs =

New labor productivity


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Old System:


New System:

= Old multifactor

productivity

8 titles/day

$640 + 400

Output


Multifactor Productivity =

RM

RM





Old System:


New System:

8 titles/day

$640 + 400 =

Old multifactor productivity

= .0077 titles/dollar

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Old System:


New System:

8 titles/day

$640 + 400 =

Old multifactor productivity

= New multifactor

productivity


14 titles/day

$640 + 800





Old System:


New System:

8 titles/day

$640 + 400

14 titles/day

$640 + 800

= Old multifactor

productivity

= New multifactor

productivity



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Multi-Factor Productivity

Output


Productivity =

Also known as total factor productivity

Output and inputs are often expressed in dollars


Contoh penggunaan j.masa asas dan deflator

2001 2000

8500

1.1

7 000

1.0

Tenaga

Elektrik dan air(RM)

Deflator

25 000

1.25

21 900

1.0

Modal

Wang tunai (RM)

Deflator

620

5.2

660

5

Bahan

Bahan mentah(unit)

Harga (RM/unit)

237

7.20

237

7.00

30

Pekerja

Jumlah jam bekerja (jam)

Kadar purata gaji (RM/jam)

Bilangan pekerja

2000

53

60

3520

50

50

Barangan separa siap

Kuantiti keluaran (unit)

Harga keluaran (RM/unit)

Peratus siap

6200

53

6000

50


Harga (RM/unit)

Barangan siap

Tahun Perkara

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Apa itu jangkamasa asas (base period) dan deflator

Dua istilah penting dalam menentukan indeks produktiviti


(v) jangkamasa asas

Digunakan sebagai tempoh rujukan untuk mengira indek produktiviti.

Antara perkara-perkara yang mempengaruhi pemilihan jangkamasa asas adalah seperti:

Tempoh pengukuran: bulan, suku tahunan, setengah tahun atau setiap tahun.

Produk dipengaruhi oleh musim atau tidak.

(perlu musim bertemu musim)

Produk sediada atau produk baru.

J masa asas tidak boleh dipilih terhadap j masa yg bermasalah: Perkembangan dalam syarikat seperti yang tidak dijangkakan seperti pembuangan pekerja, mogok dan sebagainya.

80 5.50

60 5.00

Bahan mentah (kg) Harga (RM/kg)

2008 2007

Tahun Input

Malaysia: NPC

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Deflator penghapus kesan inflasi dalam menilai sumber input dan output.

- untuk menunjukkan unsur- unsur kemasukan dan

keluaran dalam bentuk wang yang konstan.

Indek harga pengguna, indek harga pengeluar, kadar upah, indek harga bahan, indek harga tenaga dan lain-lain indek seumpamanya merupakan maklumat deflator yang boleh diperolehi daripada pihak kerajaan. Penggunaan deflator

membolehkan nilai bagi sumber kemasukan dan keluaran

dinyatakan dalam bentuk wang yang konstan.

(vi) deflator

25 000

1.25

21 900

1.0

Modal

Wang tunai (RM)

Deflator

25000

1.25


Contoh penggunaan j.masa asas dan deflator

2001 2000

8500

1.1

7 000

1.0

Tenaga

Elektrik dan air(RM)

Deflator

25 000

1.25

21 900

1.0

Modal

Wang tunai (RM)

Deflator

620

5.2

660

5

Bahan

Bahan mentah(unit)

Harga (RM/unit)

237

7.20

237

7.00

30

Pekerja

Jumlah jam bekerja (jam)

Kadar purata gaji (RM/jam)

Bilangan pekerja

2000

53

60

3520

50

50

Barangan separa siap


Harga keluaran (RM/unit)

Peratus siap

6200

53

6000

50


Harga (RM/unit)

Barangan siap

Tahun Perkara

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i) Cari produktiviti jumlah (multifactor prod) utk

tahun 2001 dan 2002.

ii) Cari produktiviti separa (single factor prod)

bagi bahan, dan modal utk tahun 2001 dan

2002.

iii) Komen prestasi syarikat secara keseluruhan.

iv) Cari nilai keuntungan syarikat tahun 2002

dengan menganggap semua produk habis

dijual.


Labor Skills

About half of the 17-year-olds in the US cannot correctly answer questions of this type

Figure 1.8

Documents

Ch01 2014 Student Handout 1